Biz Law Biz Managment

Question 0

The accrual basis of accounting is a method that recognized revenues when earned and expenses when incurred, regardless of when payment is received or made? True or false.

Answer 0

True.

Question 1

Mortgages would be considered a long-term liability or fixed liability? True or false.

Answer 1

True.

Question 2

Since contractors deal usually in large sums of money, it is recommended practice for them to use the cash basis of accounting? True or false.

Answer 2

False. Accrual basis of accounting is recommend. It is a method that recognizes revenues as earned and expenses when incurred, regardless of when payment is received or made.

Question 3

What is Accrual basis of accounting?
A. Revenue is recognized when cash is received and expenses are recorded when they are paid in cash.
B. It is a method that recognizes revenues as earned and expenses when incurred, regardless of when payment is received or made.

Answer 3

B. It is a method that recognizes revenues as earned and expenses when incurred, regardless of when payment is received or made. And recommended for contractors.